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It is unfair that public sector workers get much better pensions than people in private sector jobs. And, with not enough to go round, public sector workers should have their unaffordable pensions brought further in line with what the rest of us can expect.

That’s the argument shared by many private sector workers.

But, goes the counter-argument, don’t force us into a race to the bottom. This from TUC general secretary Brendan Barber:

'Pensions in the private sector are deeply unfair, and making public sector pensions more like private sector provision has nothing to do with fairness. It is just part of a long campaign by those on the small-state right to cut public services.’

Distribution of wages and pension scheme participation (source: TUC)

As you can see from the chart, produced by the TUC, private sector workers' chances of saving in a pension are much more strongly influenced by their wages than public sector workers.

According to the TUC, the challenge is not to level down the public sector to private sector provision in a race to the bottom, but to give private sector staff better access to proper pensions.

‘Private sector workers have every right to be angry at their poor pension provision, but cutting a nurse’s pension will do nothing to boost the pension of a shop-assistant,’ the TUC's recent paper argues, in an attempt at solidarity between public and private sector workers.

As Citywire's Lorna Bourke argues, the TUC is half right: private sector pensions are a mess and no model to emulate.

But it seems the unions' arguments are about as likely to elicit sympathy from the private sector – who are subsidising public sector pensions – as my local butcher is to get a plum defined benefit pension scheme.

Hmmm. Lorna Bourke is also only half right. Not all public sector pensions are in a mess. Some lead the field in terms of governance, investment and some are even... wait for it... funded. Not necessarily in surplus, but not a huge gaping black hole, either.

The government has focused on two groups in particular (teachers and civil servants) which had already reformed their schemes in recent years.

It seeks to lump all public sector pensions into one category so those defending them will attract little sympathy from the general public.

That general public, many of whom work in the private sector and who, even if they have access to a pension scheme, FAIL TO SAVE IN ONE.

And what happens to them in retirement? They fall back on state benefits.

Who pays for benefits? That's right, taxpayers. Taxpayers like public sector pensioners, who deferred their income during their working lives and pay tax on their income in retirement.

Given the government has yet to reform its own gold-plated public sector pension scheme, it would appear there is a good way to go before there is a balanced debate on this issue.

I find it significant that the government make little, if no, mention of the funding levels of the various public sector pensions schemes. Makes me think they're adequately funded.

Rather the government simply compare what a public sector pension is worth compared to what a private sector one is worth, plus - obviously - the need for the government to save money.

I conclude the government sees public sector pensions merely as a way of saving money. Don't seem to remember them saying the increased contributions will go into said pension schemes, only that they'll go towards solving our debt problems.

For those who support the government, I can only assume that when your boss says "I've found somebody doing a job like yours in another firm and they're paid 10% less, so I'm reducing your pay by 10%", you'll be agreeing with them, despite what your contract says.

Btw, I'm not and never have been a public sector worker, and don't currently contribute to a pension.

You imply that it is those in the private sector that are a drain on the taxpayer who is, in the main, a public sector pensioner - I think you need to get a balanced view.

Hopefully, all those public sector strikers today will feel remorse for all those disrupted by the strike today. How much has this cost the taxpayer (both public and private sector) ?

In my 34 year career in the private sector (2 in the public sector) I have never been on strike and have never had a single day off work off through illness (albeit there have been times when I have had a bad bout of flu and it has been an effort) unlike many who call a "sickie" after a reckless weekend. The cost of strikes and short/long term sickness in the public sector is huge and a massive burden to all taxpayers.

At last we have a government who is attempting to rebalance the economy away from a bloated public sector. The only way to make our economy more competitive in the long term is to ensure the private sector comes up and the public sector is reduced. This will help all taxpayers in the long term and is essential in the competitive global economy. We do not want to be a Greece, Italy or Spain where the cost of reducing the public sector debt will take many more years and a much greater cost. I applaud this government for addressing the public sector pensions issue as the previous government just swept it under the carpet along with all the other mess !

@stephen latham - if you've seriously gone into work when you've had a genuine case of flu, then that's the height of irresponsibility. Influenza is highly contagious and can cause massive problems to old people and those with respiratory problems who you could easily have infected.

Did you employer thank you for making the effort?

As for your 'calling in a sickie' on Mondays, I've seen it a lot in 30 years of working - and that's 30 years in the private sector. So, on that point we have got a long way to go before we get a 'balanced debate' haven't we!

A more interesting point is that, if I understand the chart correctly, that 36% of public sector workers earn
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Jon

Nov 30, 2011 at 14:06

Cutting public pensions WILL improve shop assistants' pensions. Firstly they will have more disposable income with which to save for a pension, and secondly their pension will go further - both as the result of having to pay less to public employees.

The TUC understandably do not acknowledge the mathematical facts as these are clearly supportive of longer work years and fewer pension years such that the balance between them is restored to affordable levels And the TUC fails to point out that if private pay was increased enough to provide the level of pensions in the public sector, then inflation would take off. The real losers would be current pensioners living on fixed incomes, and, of course, savers.

It is about time that these idiots were brought to account and prevented from using their position to willfully misinform their members,

One thing that surprises me is the rate at which FTSE100 companies have closed or downgraded their pension schemes. After all, those companies must be massively profitable given the size of bonuses and salaries enjoyed by their CEOs and Directors compared with fifteen years ago. You'd have thought that any company would be willing to reward the employees who contributed to such larger profits with a half decent pension scheme.

Also, bear in mind that at the same time as Gordon Brown made his so call 'pensions grab' in 1997, there was a simultaneous cut of 3% in Corporation Tax that those employers would have benefited from, which would have increased their profits even more.

Then a lot of companies were advised to take contribution holidays by their scheme trustees and actuaries. Surely any responsible actuary wouldn't have recommended that if they'd realised that increased longevity would have caused problems for the scheme further down the tracks.

The cost of funding final salary schemes has continued to increase for the last 25 years, for a number of reasons. None of these are directly related to the recent issue of banks lending to the wrong people - more to do with mortality improvement, investment yields and gilt yields reflected in annuities. Nowadays, approx 25% of what I (and you) pay in Council Tax becomes the employer's contribution to the employees' pension scheme. When do we say "Wow! - that's enough"? It's only at that point that any attempt to control spending gets public support. So far we have listened to the union leaders talking about poorly paid dinner ladies and less about those in the non-jobs created in the last 10 years filled by people earning £40,000pa.

Public sector employees also pay tax, which seems to have been over looked when it is stated that tax payers fund public sector pensions. My husband is a civil servant so is entitled to a public sector pension, however he pays into the fund every month. This in turn reduces the amount in his monthly pay packet. Maybe that's something some better paid private sector employees should do instead of bemoaning their lack of pension but having holidays every year, something we haven't had for 2 years. As has been said previously the government seems to want everyone, except the well paid, to be in a race to the bottom.

It makes more sense for a public sector worker to join their employer's pension scheme than it does for a private sector worker to do the same. This is because public sector pensions offer better value for money than private sector pensions offer.

The whole basis of the dispute is that the government need a scapegoat. They want to make sure that one part of the population have another group to blame rather than blaming the government for their attacks on the poor and squeezed middle. They tell us it’s class war, as though that’s a bad thing – but consider that the working class outnumbers the upper class by about 100 to one.

Public sector workers are standing up for their rights and defending their working conditions.

That’s why right wing governments have continually done what their financial supporters in the private sector and the media want them to do – neuter the trade unions who are one of the most effective barriers against redistribution of wealth upwards to the richest.

Next up on the agenda is the plan from Adrian Beecroft for employers to be able to sack anyone they want without any reason given. That may sound ok to some people here, who are probably thinking ‘it’ll never happen to me’. But one day it might – or it might happen to someone you know like your partner or your children. You’ll think it’s grossly unfair, but unless you’re a member of a trade union, there’ll be nothing you can do about it.

Many acknowledge that private sector has had a raw deal over the last few years with more to come. Yesterday a teacher commented that everyone should have pensions comparable with well paid public sector. Fine idea, but who will fund that (huge) gap? And to think that she is educating our children! I hope she is not teaching maths.

Dear Cheshire Woman wake up or get someone to teach you basic economics -

Private production i.e companies and their employees provide the goods and services that Governments then tax and it is this taxation/money if you like that pays for ALL those employed by the state including their remuneration, pensions and employment benefits. In other words there would be NO public employess without private sector production and taxation.

This is basic macro economics or how a modern economy functions. You need to understand this and then I suggest you might refrain from coming out with ludicrous statements such as - ''my husband pays into a fund everymonth and is entitled to a public pension''.

Private sector tax payers were not entitled to have Gordon Brown raid their private savings, increase their retirement age or suffer the indignation and loss of having their pensions 'stolen' through failed regulation i.e Equitable Life.

The economy and private /public sector need rebalancing and this is part of it.

On the contrary. Dedication to the call of duty. At no time was I in contact with any old or frail people sufferring from respiratory disorders. My working conditions have been such that I always ensured that I would not be putting other people at risk rather than those who go to the doctor's surgery to obtain a sick note to take additional time off thus putting many old and infirmed people at risk .

My employer appreciated my efforts enormously. I am the employer !

You clearly don't understand the balanced debate - those in the public sector who take a day's sick on a Monday are immediately costing the taxpayer. Whilst I do not condone anyone in the private sector doing likewise this is a direct cost to the employer and not the taxpayer.

@Stephen latham - Did walk down the street at all to get to work? Did you go into any shops during those days you worked when you had influenza?

@ P Williams

I’m afraid that it’s you that needs to bone up on their economic theory.

Far too many basic errors in your post to comment on fully, but if you take what you say to it’s natural conclusion, the private sector would be responsible for the army, police force and fire brigade.

On average the public sector employees are already earning more than those in the private sector so feel that the public sector pensions should be phased out altogether with the savings being used to increase the state pension substantially for all workers. This would mean less benefits would need to be handed out to the lower paid retirees when they retire.

Over the past 10 years my cash ISA's have yielded just under 5% P.A.. A FTSE all Share tracker just under 4%. Why is it then that for a male aged 65 with about 17 years life expectancy an annuity would only pay him his money back plus 1% p.a. Better for him to keep his savings in ISA's and have full access to the funds. The better returns would more than offset the tax relief on contributions. Annuities/pensions do not offer a good deal for the private sector employees. Better they are paid a bit more in lieu, so that their higher disposable incomes can be used to boost consumer spending if they don't feel it necessary to save more.

1. Public servants produce nothing: they only consume the tax pounds provided by the private productive sector but some provide certain vital services which perhaps the private sector is ill equiped to provide.e.g. defence of the realm, rubbish collection, a few other things I daresay. They do not in reality pay real tax but instead just recycle tax pounds.

2. The state is far too large and is a drag on the economy. It has to be reduced significantly to allow the economy to flourish again.This is the present governments actual agenda but only sotto voce..

3 True pay and conditions are determined by the market and this was deliberately ignored by the last government in its drive to purchase up to a million votes by an unjustified expansion in public "services". Thus pay and conditions rose greatly there in comparison to the private sector. The true price of such workers will be "discovered" on their return to the private sector.The process will be painful.

4. The former Soviet Union had no market and everyone was employed by the state as a result of which food was often scarce and anyway inefficiently distributed to the point that it sometimes was left to rot on the fields. People also had to queue for all kinds of basics even lavatory paper..

5.The actions of this government is merely corrective. It will be painful.

6. I would also be more than happy to see the cleansing effect of market forces allowed do its work in certain parts of the private sector e.g.investment banks, fund management etcas well where there is little genuine competition

7.To recap: no private sector then no public sector or instead the Soviet Union. No public sector does not prevent there being a private sector but it would not necessarily be a very pleasant society.

8. The current strikes are fruitless and will attract little sympathy from the true taxpayers.

"The whole basis of the dispute is that the government need a scapegoat. They want to make sure that one part of the population have another group to blame rather than blaming the government for their attacks on the poor and squeezed middle."

NO IT IS NOT - The Hutton report was set up by the last Government and he is a Labout peer. The whole basis is about maths, the fact that public pension costs have skyrocketed, the fact that effective public pay packages have gone through the roof, that the last Government added 1m public employees to make it even worse, and that the whole position has become unaffordable.

When will people like you look at the facts rather than resort to class war statements. Do you realise that there are very many poor people in the private sector who cannot afford to save for their own pension, let alone pay for someones else's ???

"Public sector workers are standing up for their rights and defending their working conditions."

I agree on this one, but public sector empolees have to understand that their contracts can be changed just like those in the private sector. Of course far more would be saved if we cut public employement even more. The extra 1m could go as we coped fine without them 20 years ago !!

"That’s why right wing governments have continually done what their financial supporters in the private sector and the media want them to do – neuter the trade unions who are one of the most effective barriers against redistribution of wealth upwards to the richest."

The Trade Unions are deliberately spouting misinformation such that their followers believe it. They will not win this as the economics are overwhelmingly against them. As noted above this is not a right or left wing position - simply facts and maths. If we were in the Euro we would have already CUT public salaries and pensions like Ireland and Greece -not just reduced future benefits. Instead Sterling has fallen such that we are ALL suffering from inflation (apart from ex public employees on index linked pensions)

Why is it that you just do not understand that the % of GDP spent by Government is unsustainable - it rose some 20% under the last Government - and that even after the cuts (which are only marginally above what Labour were going to do) we will still be spending more than the Treasury receives. So we actually have to do far more not only to eliminate the current deficit but also to pay back the huge accumulated debt.

This is not war against one part of the population. It is a matter of the UK's economic survival for all of us. If public spending is not cut very hard then one day no public employees will get paid a bean as the government will be unable to borrow any more.In the private sector, if spending gets out of hand people lose their jobs.There is a control mechanism. In the public sector there is not with the result that public sector workers do not account for their costs. Just look at all of the meetngs about meetings in the NHS as an example.

PensionMan, people weren't saving into pensions before this crisis. Had they been, stakeholder and auto-enrolment/AE would have been deemed unnecessary by successive governments.

Stephen, I imply nothing of the kind. I am merely illustrating that at different points in time, each sector is reliant upon the other. However, only one side of that equation is being illuminated at the moment and it suits the government to keep this about intransigent unions.

As for the cost, it is likely to be a drop in the ocean compared to the waste generated by the government within the public sector, foreign policy, etc. But far less than the bill we will have to foot for successive governments failing to make pension provision a mainstay of their manifesto, rather than using it as a political football.

I commend this government for having made a start at reforming that which the previous administration bottled it on, but we are only getting half the story. It calls for the unions to continue to negotiate, but won't provide them with scheme valuations. Would you enter into a negotiation withuot the available facts?

Finally, what is the link between strikes and illness? Long and short term illness is a problem in both public and private sector organisations, generally where it is poorly managed.

Linking it to strikes is a rather fanciful stretch of the imagination.

When explaining the need to change public section pensions, we hear a lot from the government on the need to cut costs, almost nothing about the need to ensure those pensions are fully funded.

From elsewhere on this site, I'm lead to believe some of these pensions aren't funded at all (in the sense of having a dedicated pension pot).

So, employer (the government) wants to cut their costs, they look to reduce cost of labour by unilaterally making terms & conditions worse for the workers. That's their right as an employer.

I have no problem with that, lots of employers do it. What's totally beyond me is why the government would think employees will do other than invoke their (perfectly legal) right to withdraw their labour. That's their right as an employee.

Irrelevant (to me) whether those employees are paid by the taxpayers. One might as well say all private sector workers are "paid for" by customers so should accept whatever downgrade their employer wants to make to their pay & conditions.

I understand your point and it is a different angle to much of the above but:

If the public sector pensions were to be fully funded, where would the funds be held? In cash? Not necessarily the best place for long term money. In equities/bonds? Then they would be subject to market volatility and in order to be safe would require greater than 100% funding. In gilts (earmarked)?

It seems to me that the problem is the guarantee, which will always be funded by the taxpayer, just like Equitable Life where the problem was the guarantees issued, except that in the case of EL, the gap is not funded.

The ex bankers on 60ths are a dying breed. They are retired now but many many final salary schemes have been closed, even amongst banks. This is the reason the debate continues. The elimination of the final salary schemes in the public sector is only just becoming visible now.

As for the 40ths, does this not relate to MPs? (rather than local government)?

I would have no problem with public sector workers moving to defined benefit scheme, with monies held whereever seems appropriate (as the private sector do).

What I have a BIG problem with is government dishonesty, when (imo) all they want to do is save money and consider it "inappropriate" that workers would strike to maintain their Ts & Cs. All workers do that occassionally, not sure why the government expect public sectors workers to be different (i.e. docile).

Sorry to butt in guys, however the 80ths for LG employees had in addition 1.5 times final salary as tax-free cash. When this used to be compared to 60ths, after part of the 60ths were commuted for cash the results were almost the same.

Is it not the position that many public sector workers pension contributions are not paid into a fund and invested?

Is it not the position that their pensions are pretty well fixed regardless of what the stock markets of the world are doing?

I believe that the fire brigade does set aside the contributions, including the employers contributions, as do some local authorities. They too were hit by Gordon Brown's raid and fell into deficit as a result which the LAs ( and perhaps fire brigade) are raising rates levied on all ratepayers, private and business) to compensate for the losses.

Private sector pensions are set aside and invested. Accordingly they are affected by market movements. Until the raid the private sector were adequately funded, but after the raid most fell into deficit because the funds were set up and took into account the tax free dividends to give the necessary yields. As for the private individual saving for his pension, up to 50% was wiped out as a result of the raid. To avoid any loss of final pension the individual would have had to calculate the dividends 'taken into account' and upped his contributions accordingly. Most couldn't afford to do so.

All that is being done now is not a race to the bottom but an attempt to redress the balance, albeit it downwards. If the govt had paid the contributions into a fund, with its contribution (never made because it is notional, a fiction) then all hell would have broken loose then, quite apart from market fluctuations.

Now if the govt had been setting aside the employees contributions and adding its bit to it, then there would have been a universal effect (except on MPs who would have voted themselves extra) of lowering the pensions on the raid and we would have had this strike 14 years ago. As it is MPs earn their full entitlement in 15 years, when it takes others 40-50 years to 'earn/save' for full entitlement, and that must be changed, including the speaker pension, which he gets in full if only 2 days in the job. Ditto the PM etc. Their other working time must also be included and calculated on at least 45 years working.

So if an MP for 15 years they get so much TOWARDS their final entitlement so that if they do not work the other 30 years, their pension will be small.

Strikes by the private sector on pensions has no effect on the govt, merely on the employers at the time and eventually that would have fed through to the tax receipts of the govt.

Take the present deal off the table and make it less generous and start setting aside all employees and employers contributions so that if there is another raid (and there will be) all will suffer equally, it is only just.

If they get their way then in 30 years time there will be so many people on the gravy train that the private sector will be paying so much tax and the country accumulated so much debt (Italy) that non public sector workers will leave in droves for a country that has a more efficient public sector. This will mean that there is even less money and the public system will fail like (Greece). Their hard won pensions will be worth nothing and that is what they will deserve.

There should be no defined pension at all. You should put money away if you want a decent pension. It might make some public sector realise they actually need to work instead of dreaming about spending hard earned money from the private sector.

Public sector workers get a defined pension

Public sector workers have far more days holiday than the private sector (teachers and NHS can get up to 35 days holiday)

Public sector workers take more sick days (council workers take on average 13 days, Nurses 9 days the real world take about 3 days)

Public sector workers can’t get sacked unless they do something illegal (going slow is taken for granted to make sure they are fit for their pension to live until they are 100)

This is why you are in the public sector. It is a fact that employers in the private sector would always pick the candidate from a private sector back ground over a public sector one.

I wonder why. You are not special in the public sector you do not contribute to wealth you are a drain on it and you have the arrogance to go on strike. The reason you are striking is you want to break this government because you know no one wants you in the private sector.

If you were and for some incredible reason a private sector employer gave you a job you would realise that you get what you pay for and you would not last 5 minutes.

BTW, the public sector strikers should be staking out the MPs (particularly the PMs and ministers) of the last labour govt, demonstrating against their wrongdoing. It was that govt that overspent and wasted money and borrowed up to the hilt and by their raid on private sector pensions guaranteed that this move on public sector pensions would be made, it was inevitable to begin to rebalance the injustice wrought on the private sector starting from 14 years ago.

If no real changes are made, I would like to suggest that we watch, over the next few years, ie now that private sector final salary is on its way out, at what age people are retiring. I anticipate a 10-20 year differential between the ages of those of the same age group.

"Past performance is not a guide to future performance and you might not be able to retire at the age you expected".

Many of the comments made are divisive and suggest what is being created are two nations, those employed by the state and those in the private sector. Much of this sentiment is being fuelled by the unions. If this continues I can see civil strife on the horizon and I would think it will be the unions and their members who will lose out along with that all the significant benefits they currently enjoy.

When a private company considers whether or not to introduce or continue with a pension scheme for employees, it has to look at the cost of the scheme and the question of affordability. For a scheme similar to those provided in the public sector,the cost will be approximately 20% to 30% of the payroll.

This cost , if past experience is anything to go by, is likely to increase over time because of Government legislation, involving increases to early leaver benefits, revaluation of benefits, escalation of pensions in the course of payment and stringent funding level requirements. In addition,there may be extra cost because of poor investment performance, improved mortality and the age structure of the scheme. These are the reasons why private companies have abandoned their defined benefit schemes.

As far as affordability is concerned, this will come down to the profitability of the company. This in turn will depend upon competition. The competition will include the company down the road which does not have a pension scheme and is thus able to undercut prices because they do not have the pension costs. Other competitors will come from the rest of Europe, Asia including China and India, America and any where else in the World. Many of these competitors will not have the inherent costs that a British company has, including not having to fund a pension scheme.

Yes, we live in a globalised economy. We cannot isolate ourselves. This is the real world of the private sector. it's tough, it's survival of the fittest. The public sector is isolated from these realities, but they cannot remain in isolation.

Both the private sector and the public sector are going to have to accept that the World is changing and we are not going to be able to continue enjoying the benefits we have done in the past. Remember, those benefits have largely been provided because of the indebtedness we have incurred. That debt is now far too great, things have got to change, including public sector pensions.Get in the real World.

More than a quarter of your Council Tax goes to pay for the unfunded pensions of ex-employees. Is it fair for the less privileged of us who have never been in the Public Sector to have to lose nearly half our State pension paying for the pensions of others ?

You can't compare apples and elephants. 87% of public sector workers have defined-benefit pensions. Only 12% of private sector workers have defined-benefit pensions, mostly in very large FTSE100 companies.

In the chart the TUC seems to be comparing the public sector workers to private sector workers in money-purchase schemes. How, in a recession, does the TUC propose to give private sector workers access to defined-benefit schemes which the chart shows cost three times as much as the money-purchase schemes?

As there have been numerous comments about the cost (to the taxpayer) of public sector pensions, and having just watched Newsnight on BBC 2, I thought I'd look up the Hutton report.

http://cdn.hm-treasury.gov.uk/hutton_final_100311.pdf "Chart 1.B: Projected benefit payments as a percentage of GDP – sensitivity analysis" shows payments are expected to be REDUCING every year from 2009/10.

Hence, all this talk of the cost going up is simply NOT what Hutton says.

I also found Francis Maude's performance interesting

a) caught out on Channel 4 News. He claimed pensions of lower/middle earners would be better under the proposed scheme. John Snow pointed out that's NOT what the official calculator showed. Maude had to back-track and add "for many people"

b) Paxman, on Newsnight, asked Maude about affordability as shown in the Hutton report. Maude didn't try to refute the cost as REDUCING.

Hence, to me (as someone who has never worked in the public sector and doesn't save in a pension), this is simply about the government using the public sector as a way to save money. Clearly too tricky for them to stop fighting wars and save money that way.

Clive B - I think that you will find that the Hutton report benefit payments as a % of GDP you quote are AFTER his recommendatons are implemented, Unfortunately a lot of public pension supporters make this mistake and misinform.

Of course Hutton also made some very optinistic assumptions about GDP growth which are now being seen as impossible.

But public pensions are unaffordable NOW so they have to go down.

And as the UK can afford to pay me £1m a year then using your argument there is no reason why it should not. The simple fact is that public sector pay packages have become excessive in comparison with the private sector, and there is no reason why the private employees should pay.

Few public employees even start to understand how generous their scheme is and how private employees would give an arm and a leg for the same. Private employees serious about saving for a pension contribute far far more than even the recommended increases in public employee contributions, and still end up with a much lower pension. They have seen their pension projections halved over the last 15 years. So the simple equitable answer would be to halve all public pensions NOW. But nothing approaching such a change is on the table, so public employees will still have a pay package well above the private sector.

And again tonight on the news we hear strikers blaming the bankers and other moronic claptrap. Obviously our teachers have failed to teach maths and logical thinking to their pupils who behave only as emotional sheep. I would not want to employ such empty vessels.

I have not seen so much ill informed drivel on one subject on this website for a very long time. There are valid and accurate points made here which I do not include in this sweeping generalisation but I can not believe how many people have utterly sucked up the disingenuous government spin on PS pensions.

The NHS fund is well funded and able to cope with it's liabilities.

The majority of LGPSs are in surplus - this is a matter of record, you can look them up on t'interweb and you'll find last years accounts show that contributions + investment returns exceed payouts, I have not investigated them all but I have not found one that isn't in surplus.

Where the "black hole" occurs is in unfunded schemes. DO NOT CONFUSE unfunded with non contributory. The way unfunded schemes work (Police and Fire Service and possibly others) is that the employees have paid in, in the case of the aforementioned 11% of salary and the employers have paid nothing in until the point was reached where liabilities exceeded contributions of serving members and then the employers start bleating that they don't want to meet their obligations.

Not only have the employers not paid in up to this point but the contributions have also been spent as though part of revenue. If this had occurred in a private sector scheme I am sure that all involved would be indicted and incarcerated.

Thus anyone who backs the government in attempting to renege on it's obligations is a thief by association.

Sorry you are concenred about uniformed drivel. In this context, you may wish to know that the NHS Pension scheme is wholly unfunded, as is the teachers' pension scheme. The LG pension scheme is funded, but has a deficit of about £30bn! Annual cashflow is not the same as overall surplus

So there we have it an"industrial day of action " i think not public servants are not "industrial" and to stop work is " inaction" their pensions are "provided" by the actions of industry and commerce who employ people and the employees provide the cash for government who do not have any unless give it to them , so get on the "work" ethic and put up with the changes and learn to pray that the world does not collapse financially 'cos we all wil be able to do nowt about it!!

If you are ignorant then how can you claim that others are ill informed. As another has stated you do not appear to understand finance as you base your argument on cash flow. The Government is paying pensions, so how can that be theft? If the deficit continues to grow then the UK will go bust and no pensions will be paid, so those supporting cuts are anything but thieves by association.

But to prove the point just take a look at the accounts of fire services and police forces in which you will see the pension payments to the retired are in the 30-50% range of current salaries. Both of these groups have incredibly generous schemes, and the members very often retire at 50 and then take on another job.

We, the employers, have a right to cap unintended and significant rises in benefits. We have a right not to be overcharged. So perhaps the “thieves” are those expecting over-the-top reward for their services and who fail to acknowledge the huge hidden pay rises they have had ON TOP of their above-private sector rises over the past 15 years.

Unfortunately people become very emotional when the issue affects nurses, police, firemen and even binmen/street cleaners and forget the overwhelming majority of less “glamorous” posts in public service who can be compared directly with those in the private sector. But there are plenty of other “essential” jobs in this sector. Take a lorry driver who brings food to our shops who works driving nearly all of the time (whilst firemen spend most of their time waiting in one form or another). It makes National and protracted news when, unfortunately, a fireman loses his life, but do we hear more than a passing reference sometimes when a lorry driver is killed in a crash? This just shows how skewed the public and media are.

It does not matter whether the funded local government schemes are in the black on paper. Given the generous benefits and diving annuity rates, then this suggests that the taxpayer put in too much in the first place. The value of the fund is NOT an indicator of cost.

And when it comes down to it just look at the cost of index linked annuities. A binman on £30k will get a pension of £15k which would cost over £500,000 to buy. So over 40 years the benefit in kind is £12,500 pa less around £1,000 personal contributions (all in to-day’s money assuming investment returns equal inflation). The balance has to come from somewhere and much is presently coming from those who cannot afford it.

Perhaps there should be more openness about the system, such as promotions just before retirement on final salary pensions etc. The government is trying to deal with that one via average salary but what else is going on behind the scenes, like the 60ths/80ths comparison above, sick days and the moving of ineffective workers to a different department rather than sacking? Sometimes we are not told the whole story.

How did the NHS scheme come to move to an accrual rate of 60ths in 2008 from 80ths? This seems overly generous when other scheme revisions seem to have been towards less generous benefits.

Correct me (again) if I'm wrong but if LGPS assets are based on a quantifiable figure ie now and liabilities are a calculated future cost, but the assets are still growing, how do we know that the assets will not meet future liabilities?

The main point remains about unfunded schemes - employees earlier contributions have been spent, whilst no input was required from the employer and now the pensions cost money the government doesn't want to pay. Obviously the whole system is flawed.

Would the employer/government be prepared to repay all those contributions into a fund and add in an employers contribution and a calculated amount for growth to create a fund for provision of these pensions. An argument that the benefits were/ were not affordable would then be easily settled.

Perhaps public sector employees should take their current transfer value and take responsibility for their own pensions - but where would the money come from since there is no fund?

Jon

Does a bin man earn 30k? That seems like a decent wage (above the average is it not?)

Your point about the cost of index linked annuities is valid at the moment but annuity rates are at an all time low, kept there by artificially low interest rates.

This will change. As inflation picks up (it already has) interest rates will rise and annuity rates will rise. The bottom line is where they are when you need to take your pension.